Cause and Effect Analysis

It is easy to let your mind ‘wander’ when you are working on solving some form of business problem. All businesses face problems, and you could even say that most businesses face them on a regular basis. If you own or manage a relatively large business, you likely have a problem of some kind popping up somewhere in the company regularly.

Cause and Effect Analysis

It isn’t necessarily an issue to have these problems come up – as long as you are able to quickly and effectively track down solutions. It is the businesses who are able to solve their problems as efficiently as possible that will usually rise to the top at the end of the day.

Unfortunately, far too many people wind up just sitting around the office brainstorming solutions to their problems, rather than really getting down to work on finding the right fix. In order to effectively solve problems in a timely and consistent manner, you need to have a methodology in place that can help you work through the process. Once such methodology is Cause and Effect Analysis, also known as a Fishbone Chart. By using this method, and having your team use it as well, you should be able to improve your performance as an organization when it comes to problem solving.

The Skeleton of a Fish

This method of problem solving is often known as a Fishbone Chart because it may look like the skeleton of a fish when you are finished. To get started, you are going to want to write down your ultimate problem on the left side of a piece of paper. If this process is going to be successful, one of the first things you need to do is make sure the problem is clearly defined and specific. For example, ‘low revenue’ is not a good problem to use as the start of your chart. Sure, having low revenue in your business is a problem, but something like that is far too broad in scope to use in this application.

Fishbone Diagram

Rather, problems that land at the head of a Fishbone Chart should be in the vein of ‘the specific piece of equipment continues to break down’, or ‘shipments from one specific supplier keep arriving behind schedule’. In these cases, you could go right to those problems and start to develop solutions based on the underlying causes that you determine in your analysis and research. When the problem at the head of your chart is defined specifically and is narrow in scope, the whole exercise will have a much higher likelihood of success.

Expanding the Chart

Once you have the problem listed on the left side of your page, you can then move on to adding various factors that play a role in the issue. For instance, if we were to continue with the ‘equipment breaking down’ example from above, you could add the numerous factors that may come together to influence the reliability of your machinery. Ongoing maintenance would likely be a factor on the chart, as would the workers who use the machine, as well as the parts that make up that machine. Think of as many factors as possible, and add all of them to your chart.

Expanding the Cause and Effect Analysis Chart

To finish the chart, you are going to branch off of these factors with potential causes that may be leading to your ultimate problem. This is where you start to get specific in drilling down toward the heart of the issue that is being faced. In this example, you might list ‘inconsistent maintenance schedule’ as a cause under the ‘maintenance’ factor that you added earlier. It would stand to reason, of course, that an inconsistent maintenance schedule could potentially lead to problems with a piece of equipment. By fixing the schedule and providing your equipment with the ongoing care it needs, you may find that the problem of breakdowns suddenly goes away.

Don’t be surprised if your Fishbone Chart becomes quite large as you continue to add potential causes to the various branches of the chart. Business problems tend to be rather complex, and there are many angles to consider when you are trying to figure out where things are getting off track. By taking the time to go through the process of building out a complete Cause and Effect Analysis, potential causes of the problem may come to light that you would not have thought of otherwise.

Taking Action

A chart such as this is only going to be helpful to your business if you actually take action on the results of your work. Once the chart is complete and you have a long list of causes to examine, the job then switches to looking through those issues one by one until you decide what it is that needs to change. Sometimes, you will have no trouble picking out which changes should be made, while other times you may have to debate back and forth on how you should attempt to first rectify the problem. Obviously, the sooner you are able to make the right correction, the better off the business will be in the long run.

You might find it helpful at this point to take your causes off of the chart and put them into an ordered list. Write out the numbers one through ten (or however many you need for this particular problem) on a piece of paper and then list the causes from your chart from top to bottom in order of importance (as you see it). This list will give you something to work from as you attempt to solve the matter one fix at a time. As you go down the list, you will hopefully only need to check off a few points before things are back on track.

Using a Cause and Effect Analysis, also known as a Fishbone Chart, is a great way to solve business problems. You don’t want to waste too much time or too many resources trying to solve important problems, so use this system right up front to organize your thoughts and then get down to work on finding the perfect solution.

You can read more about Cause and Effect Analysis in our free eBook ‘Problem Solving for Managers’. Download it now for your PC, Mac, laptop, tablet, Kindle, eBook reader or Smartphone.

Key Points

  • A cause and effect diagram, often called a ‘fishbone’ diagram, can help in brainstorming to identify possible causes of a problem and in sorting ideas into useful categories.
  • They are commonly used in product design and quality defect prevention to identify potential factors causing an overall effect.
  • Each cause or reason for imperfection is a source of variation.
  • Causes are usually grouped into major categories to identify these sources of variation.
  • The 5 Ms used in manufacturing industry are: machine, method, material, man Power, and measurement.
  • The 8 Ps used in marketing industry are: product/service, price, place, promotion, people/personnel, process, physical evidence, and packaging.
  • The 4 Ss used in service industry are: surroundings, suppliers, systems, and standard documentation skills.

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